Ariston to proceed with rights offer

of Zimbabwe had directed Ariston to publish additional financial information before holding a fresh EGM to consider its US$8 million rights offer.
The commission regulates all capital markets in Zimbabwe and is legally empowered in terms of the Securities Act.
SECZ was concerned that directors had not revealed sufficient information to enable shareholders to decide on the capital-raising initiative.
But SECZ chief executive Mr Tafadzwa Chinamo told Herald Business the firm pleaded for permission to proceed with the rights offer. The firm has, however, published the additional details as directed.
“They requested permission to proceed with the rights offer saying that the EGM had been held in terms of the company’s articles of association.
“But we said they had to publish more information as directed so that shareholders won’t say if they had known they would not have allowed the capital-raising scheme to proceed,” he said.
Ariston had distributed a circular containing information which shareholders used to approve the company’s US$8 million rights offer. Afrifresh Group of South Africa, which recently acquired a 40 percent stake in the horticultural concern from Emvest, has been listed as the underwriter for the rights issue directors proposed. SECZ had expressed reservations over inadequate background information about Afrifresh, particularly on whether the SA firm’s involvement in the deal was purely underwriting or as a shareholder. It also raised concern over the use of an “unlicensed” independent financial advisor, IH Advisory, and an illustration of dilution of shareholding.
The regulator demanded clarification on the impact of the recapitalisation, breakdown on the application of funds, capital expenditure programme and disclosure on the ownership status of the company’s estates. SECZ said there was need for a debt maturity profile to enable investors and shareholders to make an assessment on the firm’s debt.
Mr Chinamo earlier said SECZ was not against the firm’s rights issue, but needed to ensure shareholders were given sufficient information to make informed decisions on strategic company issues.
Ariston is seeking to raise US$8 million, with US$3 million earmarked for debts, US$2,8 million for working capital and US$2 million for capital projects.
SECZ had also raised similar concern on RioZim’s US$55 million capital-raising scheme and directed the company to address a number of issues. The firm complied and proceeded to hold the EGM during which shareholders approved the cash call initiative.